Modern biology has also given doctors more techniques for understanding the disease you have in its current state. Your genes can tell you what you inherited, but they can’t tell you how your cells are behaving now. If you think about a lot of cancer tests, they’re not about what you inherited. They’re about what your cancer is doing today.
S+B: What can you say about the progress of using genomics to create new drugs?
HASELTINE: There is no question that our knowledge has been helpful. But the problem also turned out to be much more complicated than anybody thought. People thought, for example, that maybe they would find a few extra genes that were involved in cancer. It turns out that almost every gene is involved in cancer at some level. And every cancer is genetically different. Even every cell in the cancer is different from every other cell. And maybe 20 or 30 major pathways are involved. Does gene research help us understand and solve cancer? Maybe it will give us some additional insights. But it isn’t the answer to cancer.
S+B: Do you think advances in differential diagnosis will improve the pharmaceutical industry’s return on R&D in terms of profits and human health benefits?
HASELTINE: R&D expenses in the pharmaceutical industry have gone up 20-fold in the last 20 years. That’s even in adjusted dollars, per company and per industry. Meanwhile, productivity has decreased by about a factor of 10. This is probably the biggest productivity collapse the world has ever seen, and it affects the whole industry, biotechnology companies included. When you look at the number of new compounds that are approved, it’s the sum of all the biotechnology, all the universities — the entire world trying to get approval for a new chemical.
So something is wrong, and I don’t believe it is the science, which is moving forward at a pace beyond belief. It must be structural. I’ve been an advisor to many pharmaceutical companies, and I’ve set up several biotech companies, so I have a triangulated view. Size is at the root of a lot of problems. Research and innovation is done best in small groups, but we now have pharmaceutical companies with $70 billion in sales, and they focus only on drugs that can have a broad impact. One product may be worth $5 billion to $7 billion in sales. If a company loses its bet on two or three of these, it’s lost its business.
Typically, marketing people lead these companies. They look over the research results and analyze what might “make” a market. If a drug doesn’t have a chance in the marketplace, they will demand changes to the testing to get a label on the drug to sell it. I call it the reverse Cinderella syndrome — taking a small foot and putting it into a big shoe. What’s the consequence? Drug after drug fails to create a mass market, or a drug gets approved when it shouldn’t and then gets withdrawn because of side effects.
One solution would be to create “virtual” pharmaceutical company structures, where you have many small companies with access to capital and scientists who understand the medical needs. Expenses would be kept minimal through outsourcing. Expertise would be consolidated so it isn’t redundant. Companies would aim their products at smaller markets. It may be a $50 million or $300 million market, but if they don’t invest much, they would make a lot of money.
Some of those drugs will be blockbusters, although you can’t predict which ones. Those drugs will go into the mass market, but you will have drugs selling at a much lower margin. It will be more like cosmetics companies, which aren’t bad businesses. To be an Estée Lauder, you need 4,000 products and 2,000 changes every year.